International Business
Sixteenth Edition, Global Edition
Chapter 1
International Business
and Globalization
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Learning Objectives (1 of 2)
1-1 Relate globalization and international
business (IB) to each other and explain why
their study is important
1-2 Grasp the forces driving globalization and IB
1-3 Discuss the major criticisms of globalization
Copyright © 2018 Pearson Education Limited. All Rights Reserved.
Learning Objectives (2 of 2)
1-4 Assess the major reasons companies seek to
create value by engaging in IB
1-5 Define and illustrate the different operating
modes for companies to accomplish their
international objectives
1-6 Recognize why national differences in
companies’ external environments affect how
they may best improve their IB performance
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Globalization and IB
Objective 1-1
• What is Globalization?
• Why Globalization?
• The connection between Globalization and IB.
• Why study IB?
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The Forces Driving Globalization and IB
Objective 1-2
• Globalization
−Has been growing.
−Is less pervasive than generally thought.
−Has economic and noneconomic dimensions.
−Is stimulated by several factors.
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Factors in increased Globalization
Objective 1-2
• Factors in increased Globalization
− Rise in and application of technology
− Liberalization of cross-border trade and resource
movements
− Development of services that support IB
− Growth of consumer pressures
− Increase in global competition
− Changes in political situations and government
policies
− Expansion of cross-national cooperation
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Criticisms of Globalization and IB
Objective 1-3
• Sovereignty
• Environment
• Some people may lose
• Increase to personal stress
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Why engage in IB?
Objective 1-4
• Sales expansion
• Resource acquisition
• Risk reduction
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IB Operating Modes
Objective 1-5
• Merchandise Exports and Imports
• Service Exports and Imports
• Investments
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Types of International Organizations
Objective 1-5
• MNE
• Multinational Enterprise
• Collaborative Arrangements
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Factors Affecting Ability to Operate Abroad
Objective 1-6
• Physical factors
• Institutional factors
• Competitive factors
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